Operating Cash Flow (OCF), before changes in working capital (WC), of $1.2M compared to $1.9M in the three months ended July 31, 2023, a decrease of 38%, related largely to an increased ramp of SG&A spending in preparation for the launch of New Jersey in 2H 2024 and one-time royalty and consulting payments to our Michigan partner only incurred in 2024
Free Cash Flow1 (FCF) of $0.9M, after accounting for $1.0M in cash advances to fund construction in New Jersey cultivation facility
Received Licensing Approval in New Jersey and closed Option 1 to Acquire 44% of ABCO Garden State, LLC ("ABCO"), the Company's New Jersey operation
Increased ownership of Michigan operations to 80%
Reduced outstanding debt by $1.75M through the proactive conversion of outstanding convertible debentures not due until 2027, decreasing the Company's ongoing annual cash interest by $0.2M
MEDFORD, Ore., Aug. 27, 2024 /CNW/ - Grown Rogue International Inc. ("Grown Rogue" or the "Company") (CSE:GRIN) (OTC:GRUSF), a craft cannabis company born from the amazing terroir of Oregon's Rogue Valley, is pleased to report its second quarter 2024 results for the three months ended June 30, 2024. The comparison period for 2023 is the three months ended July 31, 2023, due to the recent fiscal year-end change from October 31 to December 31. All financial information is provided in U.S. dollars unless otherwise indicated.
Second Quarter 2024 Financial Summary ($USD Millions)
Second Quarter 2024 Summary
2024
2023*
+/- %
Revenue
$7.7
$6.3
+23 %
aEBITDA
$2.5
$2.1
+21 %
aEBITDA %
32.7 %
33.2 %
-50 bps
OCF (Before Changes in WC)
$1.21
$1.9
-38 %
OCF %
14.9 %
29.5 %
-1460 bps
*Comparable 2023 data is May-July due to the fiscal year end change
1)
Includes $0.5M in one-time consulting and royalty fees only incurred in 2024
Management Commentary
"This was another exciting quarter for Grown Rogue with record revenue and aEBITDA showing the continued execution by our team. We continue to see strong sell-through, record indoor production in both yield and revenue, continued consumer loyalty with our existing products, and strong consumer response to our new, branded pre-rolls, moderated somewhat by market pricing softness in Oregon and Michigan in the quarter. We want to thank our customers who are continuing to find value in our offerings, and we strongly believe that high-quality, low-cost cannabis cultivation, that delights consumers, is a protectable moat when done at the proper scale," said Obie Strickler, CEO of Grown Rogue.
"We had a decline in our operating cash flow before changes in working capital, which was largely attributable to the ramp of SG&A spending in advance of launching New Jersey and some royalty and consulting payments to our Michigan partner that were only incurred this year. We maintain a strong balance sheet with a positive working capital position, minimal debt, and sufficient cash to fund our near-term plan, so we continue to be well positioned to take advantage of new market opportunities.
Our primary growth drivers in 2024 and 2025 continue to be our expansion efforts in New Jersey and Illinois. We expect sales in New Jersey in the fourth quarter of this year and will have an update on the specific timing very soon. Illinois design and engineering is underway, and we are targeting sales starting in the second half of 2025. Our plan for expansion remains one new market every 9 to 12 months, but we are only going to swing at the fat pitches," continued Mr. Strickler.
"I want to personally thank all of our customers, the entire Grown Rogue team, and our supportive shareholders for each doing their part to help Grown Rogue achieve our goal of becoming the first nationally recognized craft cannabis company in the U.S."
Oregon Market Highlights ($USD Millions)
Oregon
Q2 2024
Q2 2023*
+/- %
Revenue
3.7
3.2
+13 %
aEBITDA
1.1
1.1
+2 %
aEBITDA Margin %
31.3 %
34.6 %
-330 bps
* 2023 data is May-July
Michigan Market Highlights ($USD Millions)
Michigan
Q2 2024
Q2 2023*
+/- %
Revenue
3.5
2.8
+22 %
aEBITDA
1.6
1.3
+18 %
aEBITDA Margin %
45.6 %
47.1 %
-150 bps
*2023 data is May-July
Michigan operations are through Golden Harvests, LLC.
Financial Statements and aEBITDA reconciliation
Consolidated Statements of Financial Position
June 30, 2024
December 31,2023
$
$
ASSETS
Current assets
Cash and cash equivalents
7,521,886
6,804,579
Accounts receivable
2,337,007
1,642,990
Biological assets
1,700,167
1,723,342
Inventory
3,839,952
5,021,290
Prepaid expenses and other assets
527,937
420,336
Notes receivable
2,016,422
-
Total current assets
17,943,371
15,612,537
Property and equipment
9,354,186
8,820,897
Notes receivable
4,325,033
2,449,122
Warrants asset
3,717,688
1,761,382
Intangible assets and goodwill
725,668
725,668
Deferred tax asset
391,465
246,294
Other investments
2,034,782
-
TOTAL ASSETS
38,492,193
29,615,900
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
1,828,943
1,358,962
Current portion of lease liabilities
724,742
925,976
Current portion of long-term debt
608,929
780,358
Current portion of business acquisition consideration payable
1,904,649
360,000
Derivative liability1
13,800,806
7,471,519
Income tax payable
1,640,850
873,388
Convertible debentures2
1,964,092
-
Total current liabilities
22,473,011
11,770,203
Lease liabilities
1,657,353
1,972,082
Long-term debt
1,615,972
82,346
Convertible debentures
-
2,459,924
Business acquisition consideration payable
1,277,233
-
TOTAL LIABILITIES
27,023,569
16,284,555
EQUITY
Share capital
37,114,080
24,593,422
Contributed surplus
8,142,520
8,186,297
Accumulated other comprehensive loss
(115,941)
(108,069)
Accumulated deficit
(34,784,564)
(20,353,629)
Equity attributable to shareholders
10,356,095
12,318,021
Non-controlling interests
1,112,530
1,013,324
TOTAL EQUITY
11,468,625
13,331,345
TOTAL LIABILITIES AND EQUITY
38,492,193
29,615,900
1)
Represents ...
